Reserve Bank leaves rates unchanged

The Monetary Policy Committee (MPC) has decided to maintain the current monetary policy stance and keep the repurchase rate unchanged at 5.5%, announced South African Reserve Bank Governor Gill Marcus on Thursday.

The repo rate stands at a more than 30-year low of 5.5%, with the prime interest rate at 9%. The repurchase rate is the rate at which the Reserve Bank lends money to the country’s banks.

Marcus was addressing media at the end of the normal three-day MPC meeting.

Earlier, Nedbank said the MPC would face the challenge of “striking the right balance between supporting a fragile economy in an increasingly uncertain global environment and preventing stubbornly high inflation from becoming entrenched”.

The consumer price index (CPI) increased slightly in April, coming in at 6.1% year-on-year from the 6% recorded in March.

While inflation remains slightly above the 6% upper limit set by the South African Reserve Bank, it did not come as a shock as it was below market expectation of 6.2%, according to figures released by Statistics South Africa on Wednesday.